Bitcoin smashes through $12,000 to reach a new record high

Courtney Goldsmith
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Bitcoin has risen more than 1,000 per cent this year (Source: Getty)

Cryptocurrency bitcoin smashed through the $12,000 mark early this morning amid fears of a bubble among analysts.

Bitcoin, which has risen more than 1,000 per cent this year, was up 6.12 per cent at $12,411.71 at the time of writing, according to Coindesk's aggregate index.

Naeem Aslam, chief market analyst at Think Markets said bitcoin's momentum appeared unstoppable. He predicted the cryptocurrency could reach $14,000 before bitcoin futures start trading at the Cboe Global Markets next week.

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"Principally, investors are thoughtful that when institutional money (hedge funds) will be involved, the chances are that the price would move higher. Large investment funds have not been able to take the piece of the pie yet and that would be their opportunity to get on board," Aslam said.

"Bitcoin futures trading on the major stock exchanges would provide more assurance for retail investors that the derivative is trading in a regulatory frame work. This would provide tail wind for bitcoin."

However, Aslam warned a sell-off was coming: "Having said this, it is also important to remember that there are some hedge funds which are waiting for the momentum when futures will start trading and they can short bitcoin. They are highly interested in this speculative market and cannot wait to take the froth off."

Even JP Morgan, whose boss famously called bitcoin a fraud, changed its tune on the digital currency this week, saying the launch of bitcoin futures contracts by established exchanges could transform cryptocurrencies into an emerging asset class.

Yesterday, new data supported the belief that bitcoin is stealing the spotlight from gold as the number of new investors fell to a low not seen since gold prices dropped in 2015.

Read more: Bitcoin faces tighter UK regulation under money laundering plans

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